Question Four (10 Marks) On January 1, 2018, Jebreen Corp. acquired a 35% interest in Mirani Inc. for $290,000 in cash. On that date, Mirani Inc's balance sheet disclosed net assets of $480,000. It also had an equipment that was undervalued in its books by $90,000 (remaining useful life is 20 years). It had also a building that was overvalued by $30,000 (remaining useful life is 15 years). Jebreen Corp. records the purchase based on the equity method. By the end of 2018, Mirani Inc. reported total inventory of $150,000. Out of this amount, 30% represented the remaining amount of an inventory that was purchased from Jebreen Corp during 2018. Mirani Inc. plans to sell this inventory in 2019. Assume that Mirani Inc. sold 80% of the total inventory purchased from Jebreen Corp. during 2018 in the same year. Assume further that, Jebreen Corp sold the inventory to Mirani Inc. at a markup of 50% of cost. During 2019, Mirani Inc. reported net income of $120,000 and declared and paid cash dividends of $40,000. Jebreen Corp. sold inventory costing $40,000 to Mirani Inc. at a markup of 25% of selling price. On September 1, 2019. Mirani Inc. used 75% of this merchandise in its operations during 2019. The remaining inventory is consumed in the following year (2020). For 2019, Mirani Inc. reported net income of $100,000 and declared and paid dividends of $15,000. Required: 1. Calculate the amount of goodwill to be recognized in relation to the investment of Jebreen Corp in Mirani Inc. 2. Calculate the balance of the investment account at the end of 2009. Question Four (10 Marks) On January 1, 2018, Jebreen Corp. acquired a 35% interest in Mirani Inc. for $290,000 in cash. On that date, Mirani Inc's balance sheet disclosed net assets of $480,000. It also had an equipment that was undervalued in its books by $90,000 (remaining useful life is 20 years). It had also a building that was overvalued by $30,000 (remaining useful life is 15 years). Jebreen Corp. records the purchase based on the equity method. By the end of 2018, Mirani Inc. reported total inventory of $150,000. Out of this amount, 30% represented the remaining amount of an inventory that was purchased from Jebreen Corp during 2018. Mirani Inc. plans to sell this inventory in 2019. Assume that Mirani Inc. sold 80% of the total inventory purchased from Jebreen Corp. during 2018 in the same year. Assume further that, Jebreen Corp sold the inventory to Mirani Inc. at a markup of 50% of cost. During 2019, Mirani Inc. reported net income of $120,000 and declared and paid cash dividends of $40,000. Jebreen Corp. sold inventory costing $40,000 to Mirani Inc. at a markup of 25% of selling price. On September 1, 2019. Mirani Inc. used 75% of this merchandise in its operations during 2019. The remaining inventory is consumed in the following year (2020). For 2019, Mirani Inc. reported net income of $100,000 and declared and paid dividends of $15,000. Required: 1. Calculate the amount of goodwill to be recognized in relation to the investment of Jebreen Corp in Mirani Inc. 2. Calculate the balance of the investment account at the end of 2009